Flip Your Focus
By J. Patrick Traynor
The following is excerpted from “Reimagining Board Service: A Practical Blueprint for Building a High Impact Board.” You can purchase a copy here.
As fiduciaries, boards ensure the development and regular review of things such as the organization’s bylaws, policies, insurance coverage, and handbooks — as well as financial statements, audits, tax forms, investment accounts, annual budgets, and meeting minutes.
And while overseeing these details is vitally important and cannot be overlooked, the reality is that it needs to be kept in in its place or it will easily consume too much of the board’s valuable time.
Most successful organizations spend the majority of their time on the I-M-P-A-C portion of the Impact Boards framework:
Imagine the game-changing opportunity that is your CEO.
Multiply your impact by aiming higher than you ever thought possible.
Perfect the plan that propels progress.
Amplify accountability with the metrics that matter.
Communicate effectively and courageously.
Low- to average-performing nonprofits, on the other hand, spend about 80 percent of their time and collective energy on tending to administrative matters (see below).
Here’s a simple, three-step approach that will allow your board to take care of the details while still keeping an eye on the bigger picture:
Impact organizations maintain a committee that ensures the dotting of i’s and crossing of t’s.
The first step is to assemble a group of willing, qualified directors to oversee a systematic approach to taking care of important organizational details. This group will be officially charged with ensuring that staff maintain a master annual organizational checklist (see below) of important activities, documents, and deadlines — along with an accompanying implementation calendar. We recommend at least an annual committee review and periodic board reporting on this system.
The committee should also ensure that staff gather all important documents, forms, and policies in one easily accessible location.
Once all the information has been organized and archived, it’s essential that the appointed committee guide the process by establishing a formal annual timeline to review and approve, as necessary. Ideally, this committee will work in harmony with the board chair and executive director to develop a schedule that fits into the annual rhythm of the nonprofit.
Some of these documents will need to be reviewed and submitted to comply with formally established deadlines — IRS forms 990 and 5500, the annual plan and budget, and licenses and certifications. Other documents — income statements and balance sheets — will need to be reviewed and approved monthly or quarterly. Still others may only need to be reviewed every 12-24 months such as personnel and record-retention policies.
With the annual review schedule of all essential documents and activities established, the final step for this committee is to guarantee that the process lives on even after its members have cycled off the committee. This means working with the nonprofit’s CEO and key staff members to establish an internal policy and system where all of this important information can be effectively managed, maintained, and periodically reported to the board.
An effective system will ensure key activities get done on time and make locating the organization’s essential documents much easier. It will also serve as a reliable anchor in the event that there’s turnover among key organizational leaders.